Achieve efficiencies in your business using Lean

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Dr Richard Keegan, Manager at the Enterprise Ireland Competitiveness Department outlines procedures for achieving efficiencies in your business

Companies challenged by the UK’s vote to leave the EU should review their business models as one part of a strategy for coping with any depreciation in sterling and any loss of competitiveness arising from a UK departure from the Single Market.

With margins potentially squeezed, managers should consider ways of reducing their cost-base by reviewing processes and procedures.

At Enterprise Ireland, we work with clients to help them increase performance using what are called “Lean” tools and techniques.

Perhaps the most important thing to bear in mind about developing a Lean business is that human resource capacity and capability is a thread that runs through the entire process.

Lean principles

Lean principles were first developed by Toyota in Japan in the 1950s to make production processes more time- and cost-efficient.

It is very much about technology and engineering but it is not confined to that. It runs through the whole value chain with the aim of outputting a better offering to the customer at a better price.

While first developed with manufacturing in mind, Lean is now used widely in services in both the private and public sectors. Management philosophy, workforce culture and human resource development are all part of the Lean approach.

Product development and design, purchasing, manufacturing, administration, logistics and sales all come under review with the aim of working more efficiently from the shop floor to the boardroom to the point of delivery and after-sales service.

People

Experience shows that human resources are central to successful Lean processes. That means being fair to staff. It also means being firm: once you decide how things should be done, everyone must stick with it. That also means being consistent with how you deal with people, problems and issues.

Much of people’s time in business is spent handling the “day job”, doing what needs to be done, or fighting fires. Lean techniques ask the question “What are we trying to achieve here?”. This helps the business see what is actually being done – the difference between the question and the answer is the gap to be bridged.

Managers should look closely at processes, go to the place where work is done, see what is happening. It will often be quite different to what you think. That means there is gap in your understanding.

You need to know the underlying principles that affect the outcome then think about how you can improve things. Can you “put out the fires” once and for all?

Questions

In carrying out this assessment be sure the following five questions can be answered: What are you doing?

How are you doing it? Why are you doing it? Who is going to improve it? When?

Having taken this approach, whatever you do, do something. You do not have to make it perfect, just better.

There are three key areas of focus in developing a Lean Business: time, money and effort. It is also necessary to benchmark against your competitors as an ongoing basis.

Time: Examine how long it takes to carry particular tasks such as: processing an order, dealing with a claim or providing a service.

Effort: Look at the elements involved in getting work done. Be sure you know the value and need for every step along way to fulfilling a particular task.

Money: Use it as a metric for identifying wastage and putting a value on issues, problems and delays.

Waste

Wastage is a key area for identifying savings. Declare war on waste. Taichi Ohno of Toyota is credited with identifying the “Seven Wastes”: Defective Service, Over Production, Inventory, Motion, Processing, Transportation and Waiting. Today we recognise a significant eighth waste, people, ie not utilising their capabilities to improve the business.

There are many more wastes than the core eight and there is some variation between manufacturing and service businesses, but these are a good starting point on a Lean journey to competitiveness.

When implementing Lean processes, it is important to identify a problem or issue that is both challenging and achievable. It needs to be challenging enough to allow people to feel that they have contributed to its solution and also needs to be achievable within a reasonable timescale. If the problem or issue is too big or too difficult, then the team may fail, with ongoing negative repercussions on future improvement activities.

Enterprise Ireland provides clients with access to the best SME benchmarking systems and data in the world through our Lean Service Benchmarking tool, which gives an objective view of the competition and the client’s strengths and weaknesses.

We also have checklists and other tools for the type of work-practice audit that could make the difference between remaining competitive in the UK and being priced out of the market.

In fact, many exporters are already employing Lean techniques to address the threat to the bottom line caused by currency fluctuation.

Enterprise Ireland Lean programmes have helped companies in sectors such as agri-business, manufacturing, engineering and services to improve their competitive position.

Often, companies develop simplified and standardised ways of working that are not just more efficient but easier for implementation, training and monitoring. For case studies, see: www.enterprise-ireland/lean

This article originally appeared in the guide Exporting to the UK? Read the full version here

Linesight’s top tips for entering eurozone markets

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Linesight has extended its reach as a provider of professional services to the construction industry into mainland Europe and beyond in reaction to the downturn in the domestic market in 2008. Here, director Paul Butler shares some pointers on how to gain a foothold in key eurozone markets:

When working with multinationals in particular, first and foremost you have to be flexible. You have to adapt to the client’s needs in local markets. This means being willing to travel and being available at whatever time the client needs to deal with you. Our senior people travel over and back regularly to meet clients in eurozone markets.

In order to be really successful in eurozone markets, it is vital that you also have a presence on the ground, whether that is a subsidiary company, an office or a dedicated team based in the market. In the Netherlands, we have a dedicated team of 30 people, 95% of whom are based there full-time and integrated into the local community and tax system. There are generous tax incentives for people working in the Netherlands with professional accreditation, such as chartered surveyors or engineers.

It is important to gain a good understanding of local regulations and codes of practice for the industry you are operating in. This is best achieved by becoming part of the local environment with your on-the-ground presence.

The Irish mentality of “getting the job done” is key to success in mainland Europe. Irish companies are used to dealing with multinationals and working 10 to 12-hour days if necessary to make sure a job is completed on schedule. Clients really appreciate this. You need to be mindful that there are work-life balance issues in certain markets, particularly in construction – in the Netherlands for example, workers will walk off site at 3.30pm or 4pm and take their holidays at certain times. You will need to work around the fact that workers will down tools.

Enterprise Ireland companies with Global Ambition

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Attendees at Enterprise Ireland‘s International Markets Week heard from established Irish companies successfully selling globally and had the opportunity for meetings with Market Advisors, available to provide expertise on exporting to new markets.

If you are attending IMW please consider the following:

  • In which markets are you successful and how have you achieved this success?
  • What is your business/value proposition?
  • Why have you decided to target this new market?
  • What market validation have you carried out and what evidence do you have for a demand for your product / service?

Contact the International Markets team at International Markets Week for further information.

Medtech star Aerogen supported from the start by Enterprise Ireland

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Enterprise Ireland’s support of Aerogen began with feasibility funding in 1997, when John Power founded the company in Galway, and has been consistent ever since.

Having started in Galway in 1997, Aerogen has grown to the point where its innovative aerosol drug delivery solution has reached 75 markets around the world.

In every international market Aerogen is active in, Enterprise Ireland was its first port of call in terms of learning about those markets and accessing key contacts, according to CEO John Power.

Most recently, it worked closely with Enterprise Ireland’s overseas office in Dubai where Aerogen is setting up its own office to serve the Middle East.

“We worked with Enterprise Ireland’s people on the ground in Germany, France and the Nordic countries for years and we still use its overseas offices all over the world”

“We have found in every market that you will not get a better national industrial support group for exporting than we have with Enterprise Ireland. The people on the ground always go the extra mile and are contactable day and night.”

As a company, Aerogen is heavily focused on research and development (R&D). Supports from Enterprise Ireland have allowed the company to continue to innovate and develop new clinical products – which would probably have been too risky to undertake alone, notes Power.

“Our aerosol drug delivery solution made its name in intensive care units around the world. While this continues to be a strong focus, we have since developed products for use in emergency departments and are working on products designed for operating theatres.”

The agency has also been hugely supportive when it comes to attendance at trade shows, adds Power – for example Aerogen is just back from the Arab Health event, where it shared a booth with Enterprise Ireland and other Irish companies.

Aerogen’s top tips for entering European markets

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Aerosol drug delivery system provider Aerogen has been active in European markets since 2000, and the region now makes up about 30% of its total sales.

Aerogen CEO, John Power

Here, CEO John Power shares his key pieces of advice to Irish companies contemplating exports beyond the UK.

The real key to success in European markets is having something special that they want. If you have a ‘me too’ product the purchasing decision will be based on price. You need to be offering a solution to a need in the market that is superior to what these markets have themselves.

A smaller company starting to sell abroad should go with a narrow focus and build from there. If you try to generate sales in several European markets at the same time you won’t have the bandwidth to service them. And if you don’t service them right, that will be detrimental. You’re far better off to procure one distributor in one market, get that off the ground and operating properly and then replicate this in other markets.

Don’t rush into selecting a distributor. Work long and hard on getting the right one for you in each market, as if you get this decision wrong it could work against you. Look for recommendations from other companies using distributors of products in your sector in the relevant markets.

If you really want to develop a market and distribution model in a European market, nothing beats having your own people on the ground to make sure a distributor gets the maximum amount of sales for your business.

Pointers on the French Market from Irish Business Tricel​​​​​​​

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France has become a key market for Killarney-based manufacturing firm Tricel since it obtained a government licence to supply sewage systems to one-off houses there in 2011. Here managing director Mike Stack shares his insights into the French market:

• France is a gigantic market and you really have to commit resources to it. You can’t just dip your toes in and expect to be successful. The language is hugely important. You need people working for you that speak French. We have strong local teams on the ground, which has been very important. People from your company just arriving over once every couple of weeks won’t cut it. There has to be a local support network in the country.

• Having a base in France – our factory in Poitiers – has allowed us to pursue an expansion strategy into other European markets. Once we got established there, we found distributors in Belgium and then Germany. We are also focused on French-speaking markets such as Martinique and Guadeloupe now that we have built up the language capability.

• Building a strong brand has been important to us in France. Further to being awarded French and German trading licences (in 2011 and 2012, respectively) the Tricel brand for our environmental products became well established in those markets. This led us to the decision in 2014 to rebrand the whole company from Killarney Manufacturing Group to Tricel. It is quite a unique name globally and we have found since that it works well generally in international markets.

Talking The Customer’s Language

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Over half of Europeans (54 per cent) can hold a conversation in at least one additional language, 25 per cent speak at least two additional languages and 10% at least three. Irish business people are becoming more fluent, but we have to make this push more efficient, and become – like the Dutch, whose merchant culture has long made them multilingual – fluent in the languages of others.

At the heart of our complacency is a misconception that globalisation means that we can all get by speaking English, and that as native speakers, we’re alright. Another misconception is that we should speak our customers’ languages simply to be understood in case their English is not great. But really the reason the language will get you ahead is because you can research the market better, understand who your local and international competitors are (and position yourself accordingly) and be more aware of the cultural nuances in conducting business in that country.

The good news is that learning and practising languages has never been easier. The universities have intensive courses – for example, UCD’s Applied Language Centre. The specialist Sandford Language Institute in Milltown Park, Dublin, offers in-company courses, as well as courses in languages in demand, plus many courses in languages “subject to demand”. And there are familiar courses in individual languages from associations like Alliance Française, the GoetheInstitut, and Istituto Di Cultura.

The Berlin-based Abroadwith arranges immersion stays and courses where individuals or groups can learn and improve a language by staying with native speakers and going to classes in the country where the language is spoken; it has just launched a specialist business course option.

For the daily, constant, non-stop practice that everyone needs to become first at ease in speaking and understanding, and then gradually fluent, it is not always easy to get to centralised courses. But a host of online resources are available now that were undreamed-of even twenty years ago.

Comprehension: watch films in your target language – first with English subtitles, then with subtitles in the language. You can often buy old DVDs with “subtitles for the deaf” for as little as a few cents on the localised versions of Amazon. Some TV subscriptions, like Netflix, come with own-language subtitles which you can turn on through the settings. On YouTube, there are TED talks in many languages with closed-caption subtitles in the language of the speaker.

Grammar: Duolingo – a game-like app that drills you daily in your chosen language – is played by over 100 million people learning European languages, Hebrew, Russian, Vietnamese, etc. It brings you to a notional 62 per cent fluency level, which means you have a solid basic vocabulary and can use the main grammatical structures. It’s wildly addictive: many people start with one language and extend into learning several more.

Speaking: The Mixxer is a language exchange website that puts people in contact to swap languages. English is in high demand, luckily for us. You put up a brief ‘profile’ of yourself, with only as much information as you want to share, and offer to swap languages with native speakers of the language you are learning. When you are contacted, or you contact others, you talk to native speakers of your target language on Skype – typically half an hour in English and half an hour in their native language. (I talked to a French civil servant, who was due to be moved to the US; she was speaking to 10 people a week.)

Reading and local knowledge: international newspapers’ websites are updated at speed, and titles like Le Nouvel Observateur, Bild, Kommersant, and so on, are great vocabulary-builders. International TV is easy to watch online and will keep you au fait with the politics and business news of your target market.

Technical help: online dictionaries include the contextual, audio-enhanced, eight-language reverso.net – contextual meaning that you can enter a phrase and usually find an example of the phrase used in context, with audio.

TuneIn Radio: streams radio and podcasts from all over the world, with ‘slow news’ programmes in many languages.

One-to-one classes without leaving the office: most of the above are free. If you want dedicated professional teachers, italki, again using Skype, is an aggregate site on which native-speaking language teachers offer their services and charge by the hour. The advantage of this is that you can often find a teacher with specialist vocabulary relating to your business. Babbel has drills and comprehension exercises – good teaching made digital.

Cultural insight: it is now very affordable to buy used books in many language on aggregation sites such as Alibris and AbeBooks: for basic vocabulary (and the slang that you may not wish to use but you need to understand), comic books, children’s books, thrillers, cookery books, and for your own business need technical manuals, political works, business books in the language of your market. (A tip: you will learn faster if you do not look up the words you do not know as you go along, but instead underline in pencil any unfamiliar word, and when you finish the book go back and read it again – this time you will know most words by context.)

For when you are travelling: podcasts like the Irish learnfrenchbypodcast.com give you daily lessons – often free for the basic podcast, but with PDFs of the lessons with further help available for a small payment. It will make such a difference when you walk into your supplier’s or into that conference and greet people and speak in their own language – and even before you are fluent, it will break down barriers and warm the relationship. There is no better negotiating tool than a mother language.

Lean and R&D Important Enterprise Ireland Supports for Chanelle

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“We have availed of various Enterprise Ireland supports including overseas advice, R&D grants and Lean supports. We are very focused on efficiency, and the Lean supports have been invaluable in this regard.

Enterprise Ireland’s emphasis on Lean practices helped us to take things a step further and go for Shingo accreditation, the programme for which we started in 2016.”

When it comes to Enterprise Ireland supports, Chanelle Group has availed of many initiatives which have made a difference to the Galway manufacturing company.
Tom Kelly, divisional manager for life sciences and the team at Enterprise Ireland have been a great support to Chanelle Group over the years, according to founder and managing director Michael Burke.

Having started the generic veterinary and human pharmaceuticals company in 1985, Burke was focused on exports from the very early days. Enterprise Ireland was always by the company’s side as it made strategic shifts along the way such as in 1996 when it became more focused on Europe.

Awarded by the Shingo Institute at the Jon M Huntsman School of Business at Utah State University, the Shingo prize goes to organisations that demonstrate a culture where principles of operational excellence are deeply embedded into the thinking and behaviour of all leaders, managers and employees.

Chanelle is also in the process of completing a 30,000 sq ft expansion of its 300,000 sq ft facility in Loughrea as part of a €70m investment programme supported by Enterprise Ireland. This will double production capacity at the site and lead to the creation of 175 new jobs over the next five years.

€1.5 billion in cost savings show that Lean thinking works for Irish exporters

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Working from an island, as exporters must in Ireland, forces our businesses to be more competitive than those in the markets we sell to. The products and services that exporters develop here must offer customers more value than those of competitors. Irish exporters can’t just be good, they must be better. Recently, a milestone in achieving that ambition was realised.

More than 1,000 companies have now used Enterprise Ireland Lean Business supports to take practical steps to become more competitive and improve as exporters. While the outcome of the Brexit result increased urgency, competitiveness is not a new challenge for Irish business. Enterprise Ireland launched Lean programmes eight years ago, in response to the then financial crisis. Improving competitiveness can be a matter of survival in times of crisis but all companies benefit from learning how to increase profit margins, build skills, reduce waste and increase capacity.

Enterprise Ireland’s Lean Start, Plus and Transform programmes help companies at all levels of familiarity to find improvements, from design to manufacturing and service delivery, down to getting money lodged in the bank, through logistics and supply chain.

The results these first 1,000 companies have reported demonstrate that applying Lean thinking is a practical way to improve competitiveness, quickly. €1.5 billion in cost savings have been recorded. Lean thinking is also good for the domestic economy, with participating companies reporting a 10% increase in employment. Examples of what companies have achieved demonstrate the potential of Lean thinking for Irish exporters:

• Thermo Air, a manufacturer and distributor of air and heating systems, reduced costs by 8% after completing Lean Start, reporting, “The implementation of Lean has been a very positive beginning to a change in the mindset of our traditional manufacturing company. The future success of the business is on the right trajectory.” The application of Lean thinking enabled the company to reduce lead times from six to three weeks, multiplying the number of orders handled.

• NutriScience, a manufacturer and distributor of animal supplements, reports, “This initiative was a real game changer. We went from being a reactive follower to being a proactive driver.” The company achieved €176,000 in savings, at 8.6% of turnover. In addition to a more engaged workforce and a safer work environment, lead time was reduced from an average of eight to a guaranteed three weeks.

• WhatClinic.com, a website that helps patients find clinics and book appointments, used Lean Start to implement a pre-sales process that boosted new business by 15% and increased their renewal rate to over 85%.

These examples show how practical Lean thinking programmes are. High-level thinking has been transformed into useful tactics that help companies improve today. The range of companies applying Lean thinking was clear at an event Enterprise Ireland recently co-hosted with the IDA in Maynooth. Speakers included representatives from the smallest companies to internationally award-winning practitioners. The depth of understanding attendees displayed shows that Lean thinking has been fully absorbed in Ireland. Experts travel to Ireland to learn about initiatives SMEs here are implementing. This December two Irish companies, Phonovation and Topflight, will host visitors from the EU-Japan Centre for Industrial Co-operation as part of a Lean in Europe series of best practice visits.

Reaching 1,000 projects is a high level of adoption but Enterprise Ireland aims to see that figure quadrupled. The take-up rate of Lean Start, Plus and Transform is rising as companies that see initial results progress further and companies yet to start feel the urgency of not being left behind. Other Irish agencies are keen to replicate the success Enterprise Ireland-backed companies have achieved. The IDA and Local Enterprise Offices implemented programmes that show how Lean thinking can be applied to make major competitiveness improvements for both multinationals and smaller regional companies. Teagasc and Bord Bia are planning similar initiatives.

Companies that are interested in joining a programme should visit the Lean Business Ireland website to find detailed information about supports and get inspired by nearly one hundred case studies that show the savings and sales lean is already helping competitors to achieve.

Rising market for quality goods in the East offers opportunity to Irish exporters

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Irish companies should look east to find a rising marketplace for quality goods and services. Increased middle-class income has transformed dynamics in the Chinese market. Until recently, competing on price was a serious barrier for Irish exporters targeting China. But a shift in consumer preferences has expanded opportunities for overseas businesses. With the reviews and comments section of e-commerce websites increasingly influencing purchasing decisions, price is no longer the c onsumer’s main priority. Product quality has become almost as important. This shift in consumer behaviour has created opportunities for Irish exporters to invest in e-commerce and serve a growing taste for quality goods. Irish companies and brands already have the advantage of being perceived by Chinese consumers as supplying premium products and services, associated with a high level of quality.

One such exporter, Felim Meade, MD of Emerald Green Baby, describes the commercial landscape that attracted his company to the region,

“Everyone knows the Chinese market has huge potential. With the government’s five-year plan for 6.5% annual growth and its ‘Belt and Road’ initiative driving connectivity between Eurasian countries, the opportunities for growth are endless.”

“The challenge lies in accessing China’s potential in a cost-effective way. Emerald Green Baby has been selling in China for three years but spent years researching how to sell there. China is a very sophisticated and dynamic market, far more advanced than what we are used to in Europe and America. The potential for e-commerce is clear when you see that 51% of goods are bought online and 80% of online sales are done on a mobile phone in China.”

China has now overtaken the US to become the world’s number one online shopping market, accounting for over 40% of global e-commerce retail sales. Two of China’s biggest e-commerce players played a major part in that growth. In 2016, Alibaba and Tencent delivered record-breaking profits, signalling how healthy China’s consumer market is. Alibaba’s profit almost doubled to $2.1 billion and Tencent’s grew 70% to $2.7 billion.

The cross-border e-commerce market is expected to reach a 7.5 trillion RMB volume (€1 trillion approx.)  in 2017 (Source: Walk the Chat), demonstrating how appealing foreign brands are for local consumers. This year, the Chinese government announced that they plan to establish more cross-border e-commerce pilot zones to support international companies gain access to the Chinese market. While China’s regulatory environment can still pose a challenge to leveraging cross-border opportunities, these pilots are an example of how the situation has relaxed in recent years.

Enterprise Ireland has increased supports to encourage more companies to capitalise on the opportunities presented by the Chinese e-commerce market in 2018. Several Enterprise Ireland client companies, including Emerald Green Baby, Ovelle, Irish Breeze and Clevamama already sell on e-commerce platforms in China. Irish companies considering China are encouraged to conduct diligent market research and visit the region to ensure they understand consumer preferences in their sector before committing to a plan. Market research will also help companies to determine which e-commerce platform best suits their offering. While some local platforms are not well known outside China, that doesn’t make them any less important within the market itself. Enterprise Ireland’s Market Research Centre is ready to assist companies considering e-commerce expansion to China.

When visiting the region, Irish companies should also aim to meet potential partners and distributors to get a practical sense of the market and explore the need for their products or services. Relationship building is essential to doing business in China and often must be done face-to-face. Many businesses credit their interpersonal relationships as key to successful business in China. In some markets, personal connections can still outweigh other commercial considerations. Contact Enterprise Ireland in China for expert help with building those connections and growing your business in the region.

This article was originally published in the Sunday Independent

Mid-Life Dilemma: Time To Sell Out or Stock Up?

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An upswing in market momentum in 2015 pushed IPOs into the spotlight for strong-growth companies. Gordon Smith asks if they are right for every business.

Positive signs from the Irish Stock Exchange during 2015 helped to push IPOs (initial public offerings) back to prominence as a viable option for businesses. Hostelworld floated in Dublin and London raising €245 million while another Enterprise Ireland-supported company, Mainstay Medical, had a successful joint listing on the Paris Euronext and Dublin’s ESM, raising €18 million. Other prominent and well-received listings included Applegreen, Malin Corporation, Permanent TSB and Cairn Homes.

So, will we see a flurry of flotations among Irish companies? For many, the idea of going public remains shrouded in mystique.

In a bid to address this, the Irish Stock Exchange launched its ‘#IPOready’ initiative. A secondary aim of the #IPOready initiative was to nudge Irish businesses away from the traditional exit of a trade sale – a trend that has seen promising companies snapped up early– like the UCD spinout LogEntries, which was acquired by US outfit Rapid7 for $68 million.

“There have been some high-profile trade sales where the owners got an offer and went for it, but I’d love to see more people accessing capital markets to raise that funding,” says Orla O’Gorman, head of equity at the Irish Stock Exchange. “An IPO gives a business permanent strategic capital. It’s not like a loan that will need to be repaid, and it enables you to grow your business.”

Missed Opportunity

“If you’re on your first company and you get the chance to sell out for a personally significant sum, but the company did have the potential to scale and potentially IPO, it is a missed opportunity,” agrees Cronan McNamara, CEO of Crème Global and chair of the Irish Software Association (ISA).

“Some founders don’t go into business to build and sell, but when that offer comes along, they can’t refuse because they have no other way to de-risk their financial structure. They might be heavily taxed on their income, so there’s not a lot of incentive to keep plugging away. And perhaps it’s a more straightforward transaction compared to the reporting burden of going public.”

The ISA supports the IPOready programme, especially as Ireland’s software scene has few active participants who have been through the experience of life in a public company. However, an IPO may not be the only valid option for a growth-minded company. On a personal level, Mr McNamara says the greater availability of private investment is an attractive alternative. “You see Michael Dell taking Dell private because he felt they were undervalued on the market. As a business, you need a lot of structures in place to IPO, and there are a lot of very successful companies, like Mars, Bosch and Deloitte that are all private.”

Enterprise Ireland also supports the #IPOready programme. “We have a variety of funding options so that companies can grow and scale, such as the Seed and Venture Capital schemes, the Development Capital Fund and the Innovation Fund Ireland programme,” explains senior policy adviser Garrett Mooney.

“An IPO is one strategy within that mix, and we believe a certain cohort of Enterprise Ireland-supported companies should look at it.”

The Decision to Float

In weighing up that decision, John Casey, partner in PwC’s deals practice, says companies don’t necessarily need to be at a particular size or scale to consider an IPO. “The requirements for the Enterprise Securities Market in terms of the startup track record are pretty generous. It’s a question of whether investors would be willing to back the management team and back the story. Let’s say you’re a pre-revenue startup: an IPO will be a hard sell to raise money, so you tend to see that people will get funding from other sources until they build critical mass.”
Business owners have to see the value in bringing external equity into play, adds Michael Neary, a corporate finance partner with Grant Thornton. Even to embrace the concept, they’ve got to accept that sharing the pie and owning a smaller share in a bigger business is more worthwhile than owning a larger share in a smaller business.

The decision to go public may be also affected by factors beyond the business itself. A good adviser can help the business make a decision about whether or not to press ahead with a public listing if external conditions are less than favourable. “You can be just at the wrong stage, and there have been public examples of IPOs that have been pulled. Digicel were quite public about not getting the valuations they had hoped for, so they decided to hold it over. There’s no loss of face in pulling out of an IPO at the right stage, if you as a founder say ‘I think my business is worth more than that’,” he says.

Some businesses keep their options open by undergoing a vendor due diligence process that prepares them either for flotation or for a trade sale. Casey says an IPO process requires more detailed preparation in terms of due diligence. An IPO exit shouldn’t be equated with a trade sale for founders, he adds. “With an IPO, investors are backing the management team, which will likely include the founders. This may or may not be the case in a trade sale, depending on the buyer. An IPO is a method of introducing liquidity to the shareholder base and taking some money off the table. But don’t forget, the majority of funds raised in an IPO tends to be for the benefit of the company, to fund expansion, debt-reduction or both.”

 Irrespective of a company’s decision whether or where to float, the rigour of preparing the business will stand it in good stead no matter what funding route it ultimately chooses, says Mooney. “In looking at the IPO journey, you are also preparing yourself for other investment options that may arise. Governance isn’t unique to IPO. We wanted to make sure that even if entrepreneurs come out from the IPO ready programme and decide they don’t want to IPO, they will still have learned from it.”

Linesight gains from Enterprise Ireland’s networking supports

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Enterprise Ireland’s contribution in relation to knowledge-sharing, market information and access to key contacts has been invaluable to Linesight. Having built up a strong domestic presence since 1974, professional services provider to the construction industry Linesight needed to grow its business in overseas markets when the recession hit in 2008.

Linesight director, Paul Butler

The company found a series of workshops on data centres, organised by Enterprise Ireland, particularly valuable – an area which Linesight wanted to focus more on, according to director Paul Butler.

“Enterprise Ireland brought all the leading consultants and contractors together in one location to discuss the pros and cons of doing business with data centres and how to attract further data centre providers to Ireland,” he says. “All the relevant information was shared with everyone involved afterwards.”

Linesight went about sourcing and training people dedicated to providing professional services to data centre projects, which are very mechanical and technically driven. It now has a designated team which looks after a number of data centre clients in Ireland, the UK and the Netherlands.

Once Linesight decided it wanted to explore opportunities in the Netherlands five years ago, it benefited greatly from several introductions to the market, and with local providers organised by Enterprise Ireland in Amsterdam, according to Butler.

“We were very keen to get local information and find out from others who had tried the market before, the lessons they had learned,” he says.

“Enterprise Ireland put us in touch with key contacts and set up face-to-face meetings with other contractors and consultants in the sector. The support in terms of local knowledge and getting to grips with how things are done there has been excellent.”